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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

Transforming the Healthcare Supply Chain

As the Patient Protect and Affordable Care Act changes the landscape healthcare providers are being driven to transform how they deliver services. Providers are searching for ways to make healthcare more affordable, by reducing operational costs and creating efficiencies across their supply chains.

Demand and inventory management provide one of the most direct and compelling opportunities for improvement in the healthcare supply chain. On average, one-half of inventory holdings in a hospital are inactive, and ten percent are obsolete. Inventory in the supply chain represents forty percent of a hospital system’s operating expense. A five percent improvement in forecast accuracy can drive a four day reduction in inventory while improving service by insuring that the right items are on hand when they are needed.

To meet these challenges and take advantage of the opportunities for improvement in healthcare supply chains, providers are upgrading existing tools and deploying enabling technology. With the right tools, existing operational practices can be updated to ensure patients and caregivers have what they need when they need it.

Current best practices which can be implemented with Oracle Demantra Demand Management and Inventory Optimization include:
  • Optimization of stocking locations and replenishment logic based upon forward looking intelligence
  • Dynamically resizing PAR and safety stock levels based upon both policy decisions as well as forecasted variability
  • Make supplier relationships more strategic by sharing more accurate usage forecasts for contract commitments, negotiations, and forward buys
  • Leverage visibility into physician preference and their impact to help create the business case to rationalize supply or number of vendors
Healthcare provider's should investigate these technologies, as today’s healthcare field is too competitive not to utilize industry leading supply chain applications.

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